Japan’s financial regulator plans to review major banks’ exposure to overseas commercial real estate, reflecting global alertness to troubles in the sector.

The area is among the credit risks to watch this year, according to the Financial Services Agency in its annual policy guidance released on Tuesday. The regulator cited interest rate rises and deterioration in related markets overseas as reasons to assess the "situation of loans” made in this sector.

Commercial real estate has become one of the highest-profile asset classes hit by rapid rate hikes. Concerns are mounting that landlords may choose to default rather than sink money into buildings with diminished prospects for returns. Major institutional owners including Blackstone and Goldman Sachs Group are among investors that have defaulted or relinquished offices to lenders this year.

In Japan, while banks don’t provide a breakdown of their loans to the global commercial real estate sector in financial reports, the figure is understood to be relatively small. Even so, Sumitomo Mitsui Financial Group’s Chief Executive Officer Jun Ohta said in May the lender has made bad loan reserves for property, and it’s getting more cautious on U.S. commercial real estate.

In its policy guidance, the FSA also said it will increase efforts to boost the competitiveness of asset managers and pension funds. It will encourage asset management firms to enhance their expertise and recruit talent to improve their investment capabilities.

Prime Minister Fumio Kishida has designated asset management as strategically important for the country’s economic growth, seeking to push households to invest more of their savings.

The FSA, whose administrative year starts in July, said it will look into whether there are any barriers to new entrants including overseas players in the sector.